In 1903, the Mukilteo Lumber Company (later, the Crown Lumber Company) was established and continued its operations until 1930. Many of its workers were Japanese immigrants who, with their families, lived in company housing in what became known as "Jap Gulch," later changed to "Japan Gulch" and "Japanese Gulch." Most of the Japanese workers moved away when the Crown Lumber Company closed.
World War II created the incentive to use
Paine Field and Japanese Gulch as a defense position to protect the Bremerton Shipyard and the Boeing plant in Seattle. After World War II had ended, militarization ended and the Boeing plant at Paine Field was developed, a railroad was constructed in 1968 in order to carry materials to and from the Boeing plant. This railroad spur is the steepest standard gauge railroad in the United States with a 5.6% incline. This divided Japanese Gulch into two. The gulch was also considered for a potential extension of Paine Field Boulevard (
SR 525 Spur) in the 2000s. In late 2007 a development company bid on purchasing the property for developing an
industrial park. This caused a small outcry from the community, and inspired a movement to save the gulch from being developed. In 2014, the City of Mukilteo completed a purchase for 98 acres of the property from the Metropolitan Creditors Trust of Coeur d'Alene for $5.4 million, preserving the park for the public. ==Wildlife==